The New Belt Tightening

A comprehensive program to promote a healthy lifestyle will increase productivity and could reduce health-care costs by as much as 5 percent, says one analyst.Joseph McCafferty, CFO MagazineJune 7, 2004

Companies have promoted healthy lifestyles for years, but now they're going a step further to get workers to slim down. Some employers, concerned about the link between rising health costs and bulging waistlines, are offering cash incentives to employees who meet fitness targets or participate in health programs.

The National Business Group on Health estimates that obesity costs U.S. businesses $12.7 billion a year in medical costs, lost productivity, disability, and sick leave. To combat this, employers have added such healthy-living options as better food choices in the corporate cafeteria, on-site fitness centers, and access to weight-loss programs.

But "the major change has been on the incentive side," says Seth Serxner, a principal at Mercer Human Resource Consulting. "A few years ago, companies might have offered T-shirts or mugs," he says. "Now they are offering cash." Some might give discounts on health-care contributions to workers who participate in weight-loss programs; some might increase the deductible for those who don't. "They are using a carrot-and-stick approach," says Serxner.

SparkPeople Inc. favors the carrot. The Cincinnati-based online health-and-fitness coaching company offers employees an annual bonus of up to $1,000 if they meet weekly fitness targets. "The company philosophy is that you have to be in good shape to be productive," says spokesperson Mike Kramer. He says the results have been encouraging: "Our sick-day rate is almost nonexistent."

Another company, Sprint Corp., has added slower elevators and appealing stairways to encourage exercise at its Overland Park, Kans., headquarters.

Few companies have tried to quantify the results of such programs, but Mercer's Serxner contends that a comprehensive program to promote a healthy lifestyle will increase productivity, and it could reduce health-care costs by as much as 5 percent.